: The United States needs to raise revenues to bring down high budget deficits even though they are helping to fuel global growth by stoking domestic U.S. demand, International Monetary Fund First Deputy Managing Director Gita Gopinath said on Saturday.
“The high levels of deficits are also supporting growth and demand in the U.S. that have positive spillover to the rest of the world,“ Gopinath said. “But along with that growth, you’re getting higher interest rates and a stronger dollar and the second two are creating more complications for the world.”
Gopinath said that the IMF’s annual “Article IV” review of U.S. economic policies in coming weeks will again recommend that the U.S. raise tax revenues and reform its costly Social Security and Medicare programs for older Americans to bring down deficits.from last year, when the U.S. Congress was in the throes of a standoff over raising the federal debt ceiling, which threatened a potential default that would have roiled global financial markets.
“It is certainly a risk nobody needs to have to deal with,“ Gopinath said. “This happens every year. There has to be a way to resolve this brinkmanship.”
Source: Loan Digest (loandigest.net)
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